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Omni- Can You Agree To Pay The Fees

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OMNI, the third party administrator, offers districts their P3 program which is loaded usually with terrible choices that are the usual high fee options. P3 is a "Preferred Provider Network." Preferred by OMNI but no one else.

 

My sister in law works in such a district and best of the work is Oppenheimer, or Lincoln Investments.

 

Does anyone know if Omni will allow you to pay your own fees if you want to use a company that is not on your districts lists like Vanguard or Fidelity? It would seem that Omni has built this P3 network based on companies that are willing to cover the administration costs associated with running the 403 so if an individual is willing to cover those himself/herself why would it not be made available.

 

Long story short both Fidelity and "Fidelity Advisors" were on her district's list when she started. She met the "nice financial adviser" and he started her an account. At the time I was with Fidelity and she told me she was too (but she wasn't).

In comes Omni P3. They grandfather all the employees using Fidelity and Vanguard BUT she's not using Fidelity she's using Fidelity Advisors and her contributions cease. Omni and the district won't allow her to roll over into Regular Fidelity since they are now NOT on the Omni P3 list and becasue she's never contributed in the past she's not grandfathered. It's been a mess.

 

She has no 457 available.

 

BTW, I have called OMNI and no one ever gets back to me with the answer to this.

 

 

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When I google OMNI P3 403b plans, I get the following list of providers:



American Century Mass Mutual


American Fidelity MetLife


Ameriprise/Riversource Mutual Inc.*


Aspire* National Life Group (LSW)


AXA Equitable New York Life


Chemung Canal Trust Co. Oldham Resource Group*


Confidential Planning, LLC Oppenheimer


Faculty Services Corp.* PFS/Primerica


Foresters Financial PlanMember Services*


FTJ Fundchoice Security Benefit


Global Atlantic Financial Group Sgroi Financial*


GLP & Associates Siracusa Benefits Programs


Great American Insurance Group TEG Fed CU/TSA Contributions


GWN* Thrivent Financial


Horace Mann Life* TIAA-CREF


Kades-Margolis VALIC


Legend Group/Adserv* Voya Financial


Lincoln Financial Group Waddell & Reed


Lincoln Investment*



Is this the list that applies to your SIL’s school district? If so, there are several good options.


Aspire: This aggregator allows use of Vanguard’s Admiral class fund but adds a 0.15% fee. Also there’s a $40 per year fee. Opting out of using a local rep is allowed by signing up for “self-directed”.



Security Benefit: Security Benefit has a 403b plan called Direct Invest. It's internet based and bypasses the reps. Direct Invest offers about 30 funds from various providers, most of which have ER’s of about 0.50 to 1.00% and are managed funds. Among the 30 funds are 8 Vanguard Admiral class index funds. Direct Invest exists due to a relationship with NEA (the national education union and lobby). The complete list of funds available in the Direct Invest 403b are found at “Product Performance”. http://www.nearetire...enrollment/cc0q



The 8 Admiral class Vanguard funds:


Vanguard Total Stock Market Index ER 0.05%


Vanguard Total International Stock Index ER 0.14%


Vanguard Intermediate Term Bond Index ER 0.10%


Vanguard 500 Index ER 0.05%


Vanguard Growth Index ER 0.09%


Vanguard Mid Cap Index ER 0.09%


Vanguard Small Cap Index ER 0.09%


Vanguard REIT Index ER 0.12%



There is a 12b-1 fee of 0.01%, which is included in the ER’s.



The fees listed in the Custodial Agreement" are reasonable:


An annual fee of $35 for accounts of less than $50,000.


A annual fee of $30 if the employee revokes their agreement to receive all communications by mail instead of electronically.


A $25 withdrawal fee for any withdrawal not requested through the employee’s online account.



Lincoln Investment: Their Retirement Solutions Participant-Directed Platform” (PDP) is discussed in this thread:


http://board.403bwise.com/index.php?showtopic=6361


It seems to be available in some areas of NY state. The PDP uses Vanguard Admiral class funds and charges an admin fee of $60/yr.



Security Benefit’s NEA Direct Invest is the lowest cost option of the 3. Aspire is a good choice with acceptable costs in my opinion. According the the OMNI P3 website, all the providers on the list have agreed to pay OMNI's TPA fee.


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Unfortunately no. This is what she has available.

Axa

Confidential Planning

Forester

Lincoln financial

MetLife

Mutual inc

NY Life

Oppenheimer

Riversource

Security Benefit

The legend Group

Voya

 

The works at the Valhalla School District in NY

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The first article in the excellent NY Times series on K-12 403b problems featured a teacher with an expensive annuity based 403b plan with Security Benefit. At the end of the article, it explained that she had changed to the NEA Direct Invest plan.

https://www.nytimes.com/2016/10/23/your-money/403-b-retirement-plans-fees-teachers.html

 

It's not in OMNI's financial interest to promote low-cost alternatives like Vanguard or Fidelity that won't pay OMNI's fees. Of course OMNI is hired by the school district and the district COULD insist that a low-cost provider be on the list. Somebody should rattle the district's and OMNI's cages. Adding a providor like Aspire should be easy because part of the $40/yr that Aspire charges goes to the TPA.

 

What every school building needs is an advocate who will make colleagues aware of the availability and advantages of low-cost plans (like the SB NEA Direct Invest). It's there, available for use, but no one knows about it because the local SB reps aren't going to even mention it (if THEY know about it!). It's also likely that the OMNI office doesn't know about it. Or acknowledge the value of a low-cost plan.

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Of course OMNI is hired by the school district and the district COULD insist that a low-cost provider be on the list. Somebody should rattle the district's and OMNI's cages. Adding a providor like Aspire should be easy because part of the $40/yr that Aspire charges goes to the TPA.

I agree with this. 100% correct. Complaining about the way things are won't bring about the needed change but active involvement

might.

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I highly recommend Security Benefit's DirectInvest option. My wife and I are enrolled in it and we love it.

I documented the plan here.

I explained how to enroll in the plan here.

The enrollment instructions have some OCPS (FL) specific information but the rest should be relevant to you. If you need any help sorting it out, I'm always available to help.

 

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